Industrial Investment

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Context

• Last month, Finance Minister Nirmala Sitharaman asked captains of industry what was holding them back from investing in manufacturing.

Industrial production: Current Scenario

• Industrial production has shown growth in each of the first five months of this fiscal year starting April, compared with a year earlier; but worryingly, monthly numbers as seen on the Index of Industrial Production (IIP) and the S&P Purchasing Managers’ Index (PMI) for Manufacturing have progressed in sporadically.

• Gross fixed capital formation (GFCF) which is viewed as a proxy for private investment, shrank quarter-on-quarter by 6.8%.

Importance of investing in Industries

• Industries have the potential to spark productivity more than any other sector in the economy.
• The Government must identify the right projects — investments must be made in productivity-enhancing infrastructure.
• Inflation could derail the best designed public spending programmes, and hence, the need of the hour is a step up in agricultural produce to help rein in food inflation.

https://www.thehindu.com/business/Industry/explained-the-fms-call-for-industrial-investment/article66058356.ece